Axa joins Eurotunnel rescue group

French captive Axa Private Equity is giving Eurotunnel’s restructuring a Gallic seal of approval, assuaging French retail investors and taking the group a step closer to recovery.

Axa Private Equity, the buyout arm of the French insurer, is the latest investor to join the refinancing of Eurotunnel, the operator of the tunnel linking the UK and France, led by Goldman Sachs, Barclays and Macquarie European Infrastructure Fund.

 

After 10 months of negotiations, Eurotunnel last month agreed a restructuring agreement, which it is putting before shareholders on July 27 to avert bankruptcy proceedings.

 

Eurotunnel said Axa’s involvement was further proof of the plan’s potential. A spokesman for the company said: “Axa is a high calibre investor backing the plan. It is a step towards good news. It is also a reassuring sign for the retail shareholders, most of whom are French and who were concerned that the company was controlled by Anglo-Saxon investors and creditors.”

 

Under the plan Eurotunnel proposes to write off £3.3bn of its debt, or 54%, reducing its debt to €2.9bn. It will also issue listed hybrid notes, quasi-equity, to certain creditors for a nominal amount of £1bn, convertible from 2009 into equity.

 

The financial restructuring, if accepted, will be implemented through the incorporation of a new French parent company which will, in autumn 2006, launch an exchange offer, in the UK and France, to holders of Eurotunnel shares.

 

Axa was not available for comment.